-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JgPQKzJK5KuT7TPKHGcRTPv1Q5XS48HU8O9PLa4fgRUWLm2LZPUf2mtSqTGU7ADu udf0rL76bqsdJNrSiwuaiA== 0000950172-97-000604.txt : 19970623 0000950172-97-000604.hdr.sgml : 19970623 ACCESSION NUMBER: 0000950172-97-000604 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970619 EFFECTIVENESS DATE: 19970619 SROS: CSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARSH & MCLENNAN COMPANIES INC CENTRAL INDEX KEY: 0000062709 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 362668272 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-29627 FILM NUMBER: 97627183 BUSINESS ADDRESS: STREET 1: 1166 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2123455000 MAIL ADDRESS: STREET 1: 1166 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: MARLENNAN CORP DATE OF NAME CHANGE: 19760505 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on June 19, 1997 Registration No. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ MARSH & McLENNAN COMPANIES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 36-2668272 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1166 Avenue of the Americas New York, New York 10036-2774 (212) 345-5000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) J&H Marsh & McLennan, Inc. Employee Award Agreements (Full Title of the Plan) Gregory F. Van Gundy, Esq. Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas, New York, New York 10036-2774 (212) 345-5000 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) Copy to: David J. Friedman, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, New York 10022 (212) 735-3000 -----------------
CALCULATION OF REGISTRATION FEE =================================================================================================== Proposed Proposed Maximum Amount Maximum Aggregate Amount Title of Securities to be Offering Price Offering of to be Registered Registered Per Share(1) Price(1) Registration Fee - --------------------------------------------------------------------------------------------------- Common Stock, $1.00 par value, of Marsh & 5,471,800 $68.94 $ 377,225,892 $ 114,311 McLennan Companies, Inc., including the Preferred Stock Purchase Rights attached thereto(2) ===================================================================================================
(1) Estimated for the sole purpose of computing the registration fee. Calculated pursuant to Rule 457(c) based on the average of the high and low prices on the New York Stock Exchange on June 12, 1997 and adjusted for the 2-for-1 stock split to be effected as a 100% stock dividend at the close of business on June 27, 1997. (2) The Preferred Stock Purchase Rights initially are attached to and trade with all the shares of Common Stock outstanding as of, and issued subsequent to, September 27, 1987, pursuant to the terms of the Company's Rights Agreement, dated as of September 17, 1987, as amended. Until the occurrence of certain prescribed events, the Preferred Stock Purchase Rights are not exercisable, are evidenced by the certificates for the Common Stock and will be transferred only with the Common Stock. The value attributable to such Preferred Stock Purchase Rights, if any, is reflected in the market price of the Common Stock. PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The document(s) containing the information specified in Part I of Form S-8 have been or will be sent or given to employees as specified by Rule 428(b)(1) under the Securities Act. PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (including pages 23 through 49 of the Company's 1996 Annual Report to Stockholders), the Company's Current Reports on Form 8-K filed with the Commission on March 14, 1997 and April 7, 1997, the Company's Quarterly Report on Form 10-Q dated May 14, 1997, the Company's Registration Statement on Form 8-B dated May 22, 1969, as amended by an Amendment on Form 8, dated February 3, 1987, describing the Common Stock, including any amendment or reports filed for the purpose of updating such description, and the Company's Registration Statement on Form 8-A, dated September 21, 1987, as amended by Amendments on Form 8, dated September 18, 1990 and February 19, 1991, describing the Preferred Stock Purchase Rights attached to the Common Stock, including any further amendment or reports filed for the purpose of updating such description, which have been filed by the Company under the Exchange Act, are incorporated by reference herein. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel. The legality of the securities being offered under the Plan has been passed upon by Gregory Van Gundy, General Counsel of the Company. Item 6. Indemnification of Directors and Officers. Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Subsection (b) of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, or suit by or in the right of the corporation to procure a judgement in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 145 further provides that to the extent a director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith; that indemnification provided for by Section 145 shall be deemed exclusive of any other rights to which the indemnified party may be entitled; that indemnification provided for by Section 145 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person's heirs, executors and administrators; and empowers the corporation to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liabilities under Section 145. Section 1 of Article VI of the Company's Restated Certificate of Incorporation provides that the Company shall indemnify its directors and officers to the fullest extent authorized by the DGCL. The Company also provides liability insurance for its directors and officers which provides for coverage against loss from claims made against directors and officers in their capacity as such, including liabilities under the Securities Act of 1933, as amended. In certain employment agreements, the company or its subsidiaries have also agreed to indemnify certain officers against loss from claims made against such officers in connection with the performance of their duties under their employment agreements. Such indemnification is generally to the same extent as provided in the Company's By-laws. Section 102(b) (7) of the DGCL provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director: (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. Article SIXTH of the Company's Certificate of Incorporation limits the liability of directors to the fullest extent authorized by the DGCL. Item 7. Exemption from Registration. Not Applicable. Item 8. Exhibits. Exhibit Number Description 5.1 Opinion of Gregory F. Van Gundy with respect to the legality of the securities being registered 23.1 Consent of Gregory F. Van Gundy (included in his opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP 23.3 Consent of Arthur Andersen LLP 24.1 Powers of Attorney of certain directors of the Company (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1996) 24.2 Powers of Attorney of certain directors of the Company (Messrs. Barham, Nielsen and Olsen) (incorporated by reference to the Company's Registration Statement on Form S-3, Registration No. 333-28201) 99.1 Form of Employee Award Agreement Item 9. Undertakings. A. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Marsh & McLennan Companies, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 19th day of June, 1997. MARSH & McLENNAN COMPANIES, INC. By /s/A.J.C. Smith A.J.C. Smith Chairman of the Board and Chief Executive Officer SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated on this 19th day of June, 1997. /s/A.J.C. Smith Director, Chairman of the Board __________________________ and Chief Executive Officer (Principal A.J.C. Smith Executive Officer) /s/Frank J. Borelli Senior Vice President and __________________________ Chief Financial Officer, Director Frank J. Borelli (Principal Financial Officer) /s/Douglas C. Davis Vice President and Controller ___________________________ (Chief Accounting Officer) Douglas C. Davis * Director ___________________________ Norman Barham * Director ___________________________ Lewis W. Bernard * Director ___________________________ Richard H. Blum * Director ___________________________ Robert Clements * Director ___________________________ Peter Coster * Director ___________________________ Robert F. Erburu * Director ____________________________ Jeffrey W. Greenberg * Director ____________________________ Ray J. Groves * Director ____________________________ Richard S. Hickok * Director ____________________________ David D. Holbrook * Director ____________________________ Lawrence J. Lasser * Director ____________________________ Richard M. Morrow * Director ____________________________ Richard A. Nielsen * Director ____________________________ David A. Olsen * Director ____________________________ George Putman * Director _____________________________ Adele Smith Simmons * Director _____________________________ John T. Sinnot * Director _____________________________ Frank J. Tasco * By: /s/Gregory F. Van Gundy ___________________________ Gregory F. Van Gundy Attorney-in-fact EXHIBIT INDEX Exhibit Number Description of Exhibits Page 5.1 Opinion of Gregory F. Van Gundy with respect to the legality of the securities being registered 23.1 Consent of Gregory F. Van Gundy (included in his opinion filed as Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP 23.3 Consent of Arthur Andersen LLP 24.1 Powers of Attorney of certain directors of the Company (incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1996) 24.2 Powers of Attorney of certain directors of the Company (Messrs. Barham, Nielsen and Olsen) (incorporated by reference to the Company's Registration Statement on Form S-3, Registration No. 333-28201) 99.1 Form of Employee Award Agreement EX-5 2 EXHIBIT 5.1 - OPINION EXHIBIT 5.1 June 19, 1997 Marsh & McLennan Companies, Inc. 1166 Avenue of the Americas New York, New York 10036-2774 Ladies and Gentlemen: I am General Counsel and Secretary of Marsh & McLennan Companies, Inc., a Delaware corporation (the "Company"). I have acted as counsel to the Company in connection with the preparation and filing of a Registration Statement on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended, for the registration of 5,471,800 shares of common stock, par value $1.00 per share, including preferred stock purchase rights (the "Shares"), of the Company relating to the J&H Marsh & McLennan, Inc. Employee Award Agreements (the "Agreements"). In connection with the foregoing, I, or attorneys under my supervision, have examined the minute books and stock records of the Company, the Certificate of Incorporation and By-Laws of the Company, the Registration Statement, the Agreements and resolutions duly adopted by the Board of Directors of the Company relating to the Agreements. In addition, I, or attorneys under my supervision, have reviewed such other documents and instruments and have conferred with various officers and directors of the Company and have ascertained or verified to my satisfaction such additional facts as I have deemed necessary or appropriate for the purposes of this opinion. In my examination I have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified, photostatic or facsimile copies and authenticity of the originals of such latter documents. Based upon the foregoing I am of the opinion that the Shares to be issued under the Agreements have been duly authorized and, when issued and delivered in accordance with the terms of the Agreements, will be legally issued, fully paid and nonassessable. My opinion is limited to matters governed by the laws of the State of New York and the General Corporation Law of the State of Delaware. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. This opinion is solely for your benefit in connection with the Company's offer and sale of the Shares, and is not to be used, circulated, relied on, quoted or otherwise referred to for any other purpose without my express written permission. Very truly yours, /s/Gregory F. Van Gundy Gregory F. Van Gundy General Counsel EX-23 3 EXHIBIT 23.2 - CONSENT EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Marsh & McLennan Companies, Inc. on Form S-8 of our reports dated February 26, 1997 (March 12, 1997 as to the last paragraph of Note 3), appearing in and incorporated by reference in the Annual Report on Form 10-K of Marsh & McLennan Companies, Inc. for the year ended December 31, 1996. /s/Deloitte & Touche LLP Deloitte & Touche LLP New York, New York June 18, 1997 EX-23 4 EXHIBIT 23.3 - CONSENT EXHIBIT 23.3 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-8 registration statement of our report to the Board of Directors of Johnson & Higgins dated March 11, 1997 included in Marsh & McLennan's Form 8-K filed with the Commission on April 7, 1997 and to all references to our Firm included in this registration statement. /s/Arthur Andersen LLP __________________________________ Arthur Andersen LLP June 18, 1997 New York, New York EX-99 5 EXHIBIT 99.1 EXHIBIT 99.1 JOHNSON & HIGGINS 125 BROAD STREET NEW YORK, NEW YORK 10004 PERSONAL AND STRICTLY CONFIDENTIAL June 20, 1997 [Name of Employee] [Address of Employee] Re: Employee Award Dear [Name of Employee]: This letter is to inform you that in accordance with the Stock Purchase Agreement among Johnson & Higgins, the stockholders of Johnson & Higgins and Marsh & McLennan Companies, Inc. (the "Company"), you (the "Employee") have been awarded [ ] shares of common stock, par value $1.00 per share, of the Company (the "Stock Award") and payment of $[ ] in cash (the "Cash Award," and together with the Stock Award, the "Award"), upon the terms and conditions described in Annex A hereto. The number of shares referred to above has been adjusted to reflect the stock split recently announced by the Company. The Award is subject to you countersigning one copy of this letter (and providing your Social Security Number) and the Stock Power enclosed as Annex B hereto, and returning them so that they are received by Johnson & Higgins (125 Broad Street, New York, New York 10004, Attn: George Kadri) within 30 days of the above date of this letter. However, to qualify to receive the next dividend to be paid on the Common Stock, you must properly sign and return this letter and the enclosed Stock Power to the address specified above so that it is received no later than July 7, 1997. The Stock Power, which should be signed by you but should otherwise be left blank, will be used by the Company only in the event that a portion of your Stock Award is forfeited under the terms of Annex A, in order to transfer the forfeited portion to the Company or its designee. A copy of a Prospectus (the "Prospectus") with respect to the shares of Common Stock subject to the Stock Award, as well as a copy of the Company's 1996 Annual Report to Shareholders (the "Annual Report"), is being delivered to you simultaneously herewith. Also enclosed as Annex C is a Beneficiary Designation Form, which may be used by you to designate beneficiaries to receive the Award in the event of your death. Use of the Beneficiary Designation Form is voluntary and you may return it to the Company at any time. A second copy of this letter is enclosed for your records and may be retained by you. Please confirm your receipt of this letter and your acknowledgment of the Award and the terms and conditions set forth in Annex A and receipt by you of a copy of the Prospectus and the Annual Report, by countersigning one copy of this letter (and providing your Social Security Number) and the Stock Power and returning them to Johnson & Higgins in the enclosed envelope. When these documents have been properly signed and received by Johnson & Higgins, this letter, together with Annex A, will constitute a binding agreement between you and Johnson & Higgins. Please note that the recent stock split referred to above is a "two-for-one" split. Until June 30th, the market price of the Company's stock will continue to be quoted on a pre-split basis, that is, as double the price of the split shares. Please remember that the executed copies must be received by Johnson & Higgins within 30 days as provided above for you to be entitled to your Award upon the terms and conditions set forth in Annex A, and must be received no later than July 7, 1997 for you to receive the next dividend to be paid on the Common Stock. JOHNSON & HIGGINS By:_________________________ Name: Norman Barham Title: President Accepted and Agreed by: EMPLOYEE __________________________ Name: Date: __________________________ Social Security Number Annex A Terms and Conditions of Award1 Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the letter to which this Annex A is attached (the "Agreement"). 1. Upon receipt by Johnson & Higgins from the Employee of a copy of the Agreement countersigned by the Employee (and providing his or her Social Security Number) and an executed Stock Power as provided in the Agreement, the Company will issue the shares of Common Stock subject to the Stock Award registered in the name of the Employee. The Stock Award will be held by the Company until such time as it may be distributed to the Employee in accordance with the terms of the Award set forth in the Agreement and its Annexes. However, as more fully described below, dividends declared on the Common Stock (other than dividends payable in additional shares of Common Stock pursuant to a stock split, which shall be delivered to the Employee upon delivery of the shares in respect of which such dividend shares are issued) and having a record date on or after the date of issuance for the Stock Award will be paid directly to the Employee in respect of all shares subject to the Stock Award. (For all purposes of the Agreement, the issue date for the Stock Award shares will be deemed to be July 7, 1997 if Johnson & Higgins receives the documents referred to above on or prior to July 7, 1997. For documents received after such date, the issue date for the Stock Award shares will be deemed to be the date of receipt of documents by Johnson & Higgins referred to above.) 2. In accordance with the terms of the Award, the Company will deliver to the Employee on each of the first [four]2 anniversaries of April 1, 1997 (each an "Anniversary Date"): (i) certificates representing the number of shares equal to [25%]3 of the total number of shares of Common Stock subject to the Stock Award rounded to the nearest whole number of shares and (ii) a check representing an amount in cash equal to [25%]2 of the total amount of cash subject to the Cash Award, plus interest at the rate of 5% per annum on the amount of the Cash Award (less any portion thereof previously paid) from April 1, 1997 to, but not including, the respective date of payment (less any portion of such interest previously paid) except as provided below. Interest accrued on any overdue amount of the Cash Award will be paid when such overdue amount is paid. 3. (a) If, prior to the applicable Anniversary Date, the Employee's employment with the Company and its subsidiaries terminates for any reason (other than (i) because of the Employee's death or Disability (as defined below), (ii) by the Employee for any reason after such time as the Employee reaches age 65 or (iii) by the Company or any subsidiary other than for Cause (as defined below)), the portion of the Award not then payable or deliverable will be immediately forfeited. In such event, certificates representing the shares of Common Stock subject to the Stock Award which have been forfeited will be cancelled by the Company and neither Johnson & Higgins nor the Company nor any of their subsidiaries shall have any further obligation to release to the Employee any forfeited shares under the Stock Award or make any forfeited payments to the Employee under the Cash Award. (b) If the Employee's employment with the Company and its subsidiaries terminates by reason of the Employee's death or Disability, if the Employee's employment is terminated by the Employee for any reason on or after such time as the Employee reaches age 65, or if the Employee's employment is terminated by the Company or any subsidiary other than for Cause, (i) all shares of Common Stock remaining in the possession of the Company which are subject to the Stock Award will be released to the Employee (or the Employee's beneficiary in the case of the Employee's death) and (ii) all amounts of cash subject to the Cash Award which were not previously paid will be paid to the Employee (or the Employee's beneficiary in the case of the Employee's death), together with interest at the rate described above through the date of termination. - -------- 1 The terms of Awards to certain retirees will be modified to the extent appropriate to accelerate receipt of Awards. 2 [Three] in the case of Awards of $500,000 or less. 3 [One-third] in the case of Awards of $500,000 or less. (c) For purposes hereof, Disability will have the meaning set forth in the Company's Long-Term Disability Plan, as in effect on the date hereof. For purposes hereof, termination for "Cause" shall mean termination of employment following: (i) the Employee's conviction for the commission of an act or acts constituting a felony or similar offense, (ii) the Employee's intentional engagement in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise, or (iii) the Employee's willful and continued failure to substantially perform the Employee's duties to the Company (other than any such failure resulting from the Employee's incapacity due to physical or mental illness) after written notice to the Employee from the Company. 4. The Company shall withhold from any payment or issuance made in connection with the Employee's Award, amounts of withholding and other taxes due in respect thereof, and to take such other action as the Company may deem advisable to enable the Company to satisfy any and all tax obligations. The Company, at its discretion, may withhold from the amounts payable under the Cash Award prior to withholding from amounts payable under the Stock Award. 5. In the event the Company is required, under any rule of or listing agreement with the New York Stock Exchange, to obtain shareholder approval of the transactions contemplated by the Agreement and the other, similar agreements referred to in the Stock Purchase Agreement, and the Company is unable to obtain such approval in a manner that does not materially burden or delay consummation of such transactions, the Company may meet its payment obligations under the Agreement by postponing the issuance (but not the delivery to the Employee on the first Anniversary Date) of shares of Common Stock until the first Anniversary Date (or, if earlier, the receipt of shareholder approval) (without adversely affecting the right to receive dividends or dividend equivalents) and/or by paying cash to the extent necessary to comply with such shareholder approval requirement, or in any other manner that the Sellers' Committee (as defined in the Stock Purchase Agreement) may approve in writing. In no event, however, shall the Company be entitled to delay or avoid the performance of its obligations under the Agreement, including delivery of the Award (as modified by the Company to implement the matters referred to in the preceding sentence), by reason of such shareholder approval requirement. 6. The Award shall not constitute an employment agreement and neither the Award nor anything contained in the Agreement and its Annexes will confer on the Employee any rights to remain in the employ of the Company or any of its subsidiaries. Awards will not be treated as compensation for purposes of calculating any benefits that may be payable to Employees under any existing or future pension plans in which they may participate. 7. Upon issuance of the shares of Common Stock subject to the Stock Award, the Employee will have rights as a shareholder of the Company, including, without limitation, voting and dividend rights, in respect of the shares of Common Stock subject to the Stock Award except for any shares of Common Stock that have been forfeited by the Employee. 8. Neither the Award nor any rights with respect thereto will be assignable by the Employee or subject to any encumbrance, pledge or charge of any nature (except to the extent the Award has become payable or deliverable). Any action taken in violation of the preceding sentence shall be null and void. However, the Employee shall be entitled to designate a beneficiary to receive the unpaid or undelivered portions of the Award in the event of the Employee's death. A beneficiary designation form, when completed, will continue in full force and effect unless and until the Company receives a later dated beneficiary designation form or a letter of revocation executed by the Employee. 9.* For a period of one (1) year following the termination of the Employee's employment with the Company or its subsidiaries (other than by the Company without Cause), the Employee shall not engage in any of the following acts: - -------- * Paragraph 9 to be deleted in Agreements with Managing Principals. (a) solicit, accept or service business (i) from any clients or prospects of the Company or its affiliates who were solicited directly by the Employee or where the Employee supervised, directly or indirectly, in whole or in part, the solicitation activities related to such clients or prospects or (ii) from any former client who was such within two (2) years prior to such termination and who was solicited directly by the Employee or where the Employee supervised, directly or indirectly, in whole or in part, the solicitation activities related to such former client; or (b) solicit any employee of the Company or its affiliates to terminate his employment. 10.** The Awards granted to you hereunder are being granted, in part, in full satisfaction of any and all obligations of Johnson & Higgins to you under the Johnson & Higgins Principal's Compensation Plan,which has been terminated as of March 31, 1997. Notwithstanding the foregoing release, Johnson & Higgins expects to make a one-time payment to Principals equal to $42.25 per unit held under such plan as of March 31, 1997, in respect of the first quarter of 1997. Accordingly, except for this $42.25 payment per unit, no one will be entitled to receive any further payments or benefits under such compensation plan. 11. The Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Johnson & Higgins shall cause the Company to comply with the Agreement as contemplated hereby. 12. The Agreement will be governed by and construed in accordance with New York law. - -------- * Paragraph 10 to be deleted in Agreements with employees who are not Principals or Managing Principals -----END PRIVACY-ENHANCED MESSAGE-----